I'm thinking of getting a credit card to build my credit score, but finding it difficult to compare them. Besides fees & charges (which are already quite complicated) there are also the rewards schemes, limits, etc.
Any idea where to start? Is there a standout favourite? Or a good tool for comparing them?
Posted Jan 23, 2022, 6:11 AM UTC
I'd suggest having a look at Sanlam's MoneySaver.
Made a post about it a bit ago.
There's some inconveniences involved but you might still like it if you want a no frills rewards system. Typically loyalty programs try to get you into a tiering system, and you only really do well in them if you earn the tiering points (which don't always promote good financial behaviour).
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All 5 major banks offer a R40 entry card (ABSA R44) so I would just go with the bank that you are currently with (less fees with payment of card balance ie. debit order or transfer would probably be free and instant and that saves money). Some are maintenance and some are maintenance and credit facility fee but they add up to R40.
If you think your monthly spend is going to be R5 000+ it is probably a good idea to check out the different reward programs. I would work out the theoretical points/cost. In my experience it is always most economical to use points for bank charges and card fee reversals and then investment accounts. Third party points tend to be less efficient but I can't speak for all the rewards programs and their partners.
Thanks, this is great!
Does this mean working out how many points I would get based on previous expenses?
Yes, the more you spend the more likely it is that a rewards program is going to be a good choice.
It needs to break even at the very least so if it costs an extra R25 you need to be making that value back in points each month otherwise you are worse off by enrolling into it.